Kinder Morgan Inc. has agreed to buy El Paso Corp., creating the world's largest oil and gas pipeline company. Both Houston-based companies have pipelines in the Rocky Mountain region. Together, they have staked in some 80,000 miles of pipeline. The buyout by Kinder Morgan (NYSE: KMI) of El Paso (NYSE: EP) is valued at about $21 billion in cash plus $17 billion in debt. The deal is expected to close by mid-2012. The deal also includes a pair of affiliates, Kinder Morgan Energy Partners LP (NYSE: KMP) and El Paso Pipeline Partners LP (NYSE: EPB), MarketWatch reports. El Paso Pipeline Partners controls Colorado Springs-based Colorado Interstate Gas (Cigco), with about 4,300 miles of natural gas pipeline in Colorado, Wyoming and neighboring states. El Paso Corp. also operates the 680-mile Ruby Pipeline, which was placed into service in July. It's a $3 billion system to carry natural gas from Wyoming to Oregon whose construction was supported by then-Colorado Gov. Bill Ritter. Meanwhile, Kinder Morgan Energy Partners owns 50 percent of the 1,679-mile Rockies Express pipeline from western Colorado to eastern Ohio, which was completed in 2009. It also operates the Pony Express pipeline, originally built to carry crude oil and converted to carry natural gas in 1997. The line runs about 500 miles from southeastern Wyoming through northeastern Colorado into Kansas. Kinder has proposed converting the Pony Express pipeline to again carry oil from the promising Niobrara play spanning the Colorado-Wyoming border, the Denver Business Journal's Cathy Proctor reports in this week's print edition. ( DBJ subscribers can read that report here.) Under terms of the Kinder-El Paso deal, El Paso will become a subsidiary of Kinder Morgan, which intends to sell off exploration and production assets.